Another record-setting sales year for Freudenberg

Leesa Smith, Freudenberg North America president and regional representative.

WEINHEIM, Germany—Freudenberg Group posted record-setting sales for the fourth straight year in 2013, with the $9.14 billion in revenue 5.4 percent more than 2012.

Consolidated profit, however, dropped slightly to $554.1 million from $597.2 million in 2012. The firm said the 2013 figure included one-off extraordinary items.

The company posted sales of about $8.3 billion in 2011 and $8.71 billion in 2012.

Freudenberg's worldwide employment rose to 39,897, up from 37,452 in 2012.

“Freudenberg is now more innovative and more successful than ever before,” Mohsen Sohi, speaker of the board of management, said in a news release. “Despite a challenging economic environment and negative exchange rate effects, we have grown profitably and sustainably. Sales increased in almost all business areas.”

Leesa Smith, Freudenberg North America president and regional representative, said the firm grew in all markets relative to the Freudenberg Group in 2013. Those markets are automotive; textiles and clothing; medical and pharmaceutical; chemicals; energy; mechanical engineering; aftermarket; and construction.

Smith said over the last four years, the firm benefited from the economic recovery in the U.S. Sales in North America increased by almost 6 percent in 2013.

“The economic recovery was certainly helpful,” she said. “All of our businesses took steps during that time. We continued to focus on lean manufacturing, find opportunities for synergies between our companies as well as opportunities for shared services. We're reaping the benefits from those activities.”

Freudenberg decreased its net debt by 17 percent to about $716.5 million. Smith attributed the achievement to having the benefit of increased sales, as well as the firm improving its working capital. She said Freudenberg has improved profit performance, prudent cash management, and it has improved its capital management across all 12 business groups.

It invested about $766 million, about $316.5 million in production plant, tangible assets, buildings and intangible assets. It expanded the capacity for its Evolon brand of microfilament products in Colmar, France; added a new plant for cabin air filters in Chengdu, China; two logistics centers in Kaiserslautern, Germany, and Potvorice, Slovakia; and a site for air filters in Jacarei, Brazil.

While Freudenberg continues to invest in markets of strength, such as seals and gaskets, Smith identified five strategic growth markets where the company plans to invest for future growth: chemical service technology; medical technology; oil and gas industry; industrial filtration; and vibration control technology.

Smith said the firm primarily will look to execute its buy and build strategy, which involves it identifying businesses with either a technology or material expertise match to acquire and build. She said this strategy lends itself to a faster rate of return than growing organically.

“First and foremost, our focus is to continue to grow profitably and sustainably,” Smith said. “We're going to continue our sound financial approach, but we are going to continue to focus on those five key, what we call, our green areas.”